It’s been bad before but it’s got worse!
What am I talking about? Competition, that’s what!
Once upon a time, all you had to do was hang up a sign, know what you were doing, smile, and start selling, right?
Yeah right! It’s NEVER been that easy because as soon as Cavewoman Jane started her pelt scraping business for all those people too busy hunting Woolly Mammoths to clean their own pelts, Caveman Joe next door started in competition. And once those two were showing signs of success every Tom, Dick and Hairy decided they would open their pelt-scraping businesses too!
However it has become increasingly difficult to get your business out there and differentiated in today’s social-media world. What is true is that once, you may have been able to develop brand leadership. The leather bags you made and sold may have competed with others, but you could distinguish yourself by better quality or the extra service, perhaps offering free leather renovation every 5 years. Today however it is hard to be heard above the noise that comes from increased competition, better trained entrepreneurs competing, cheap social media advertising and marketing – disruption is in the marketplace.
Larger businesses just have to play in that field. Businesses like Apple just have to compete on the traditional competitive advantages of better technology and reliability. Burberry have to sell based on their high-end quality brand. Department stores have to have expanded product lines and better prices. The one thing they have in common over the small business is they have size and clout – bigger margins means they can shout louder above the throng.
Small business however can’t keep playing in that field. It is an exceptional small business that can make raincoats and sell them for thousands of dollars each as if their brand compared to Burberry. Unlikely that a two-partner garage-based PC manufacturing business can create an Apple-like ecosphere family of products. Mum and dad’s corner store is probably unable to stock the range of products available in a large department store.
So how can small business create a new field on which they can compete successfully?
There is a growing trend for small businesses to target niche markets rather than to try to do it all. These niche markets suit customers who appreciate the specialty of that niche. The niche they create can be by product, or by the type of service.
For example instead of a cleaning business with its myriad of competitors, you might consider cleaning niches such as specialising in decluttering wardrobes, or specialising in cleaning gutters, or specialising in cleaning upholstery. Someone interested in starting a business repairing computers might start a service niche in doing all the repairs on-site or after-hours.
It is more than likely that some niches will not be devoid of competition. For example specialising in cleaning gutters will probably have some pretty significant competition from other businesses who clean gutters as part of a lawn-mowing service or a handyman service, or who clean gutters as part of a painting service. However this competition is unlikely to be well-organised in that niche market as a specialty and you can then stand out from the crowd as experts in gutter-cleaning, and not as an add-on.
In some markets, small businesses struggle to offer a point of difference between themselves and their competition. Operating in a niche gives you that point of difference.
But will you find a large enough market if you drive into a niche?
Well, firstly that is why larger businesses will find it difficult to go into ultra-specialist niches. They need scale. A small business however doesn’t need that kind of scale and if you keep overheads down or flexible, you should be able to find the sales to match your size. Niche marketing appeals to a growing need of personal solutions. Specialised services provide some kind of personal or professional development for their customers or maintains or enhances something they have like furniture or the home, that customers cannot get from big-box stores. The niche model matches a specialised solution with a specific problem or need.
Niche marketing reinvents the way customers buy – not from a store that offers everything but without being an expert in anything, but from a person who specialises in exactly what they want.
Learn more about different business models at teikoh.com
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